Health care inflation takes a breather

The good news for payers: Health care spending is estimated to have grown 7.8 percent in 2003, a slowdown from the 9.3 percent growth seen in 2002.

The good news for providers: During the next 10 years, health spending growth is expected to outpace economic growth, with the health care portion of the gross domestic product expected to increase from 14.9 percent in 2002 to 18.4 percent in 2013. Factors affecting this trend, when categorized by public or private spending, include states' decisions to limit Medicaid spending in light of state fiscal problems and the expiration of legislated Medicare payment amounts. For private spending, growth in health insurance spending per enrollee is projected to slow because of a modest deceleration in medical prices and use.

These projections, published in Health Affairs, do not take into account the passage of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. The growth path projected for national health spending for 2004–2013 may be considered the baseline against which the effect of this legislation can be measured.

SOURCES: CENTERS FOR MEDICARE & MEDICAID SERVICES, OFFICE OF THE ACTUARY; AND US DEPARTMENT OF COMMERCE, BUREAU OF ECONOMIC ANALYSIS, AND BUREAU OF THE CENSUS